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Tuesday, July 11, 2017

Evading their tax burden

The super-rich are by far the top beneficiaries of U.S. security, tax laws, and the financial system. Households with wealth over $40 million evade 25 to 30 percent of their personal income and wealth taxes. A higher percentage of Americans—14.8 percent—were living in poverty in 2014 than during the late 1960s and early 1970s. And extreme poverty, defined as living on less than $2 a day, has roughly doubled from 1996 to 2012, according to Kathryn Edin and H. Luke Shaefer’s book $2.00 a Day: Living on Almost Nothing in America.The average 1% household increased its wealth by $3 million in 2016. Since much of that was in the form of stock gains, they paid tax on only a small part of their incomes, and then took an average of about $200,000 per household in tax subsidies. When ALL forms of taxes and income and capital gains are considered, the richest 1% pay lower tax rates than the poorest 20% of Americans. Housing: Start with the homes, the expensive homes, the estates. For the mortgage interest deduction alone, households earning over $100,000 in 2012 claimed 77.3 percent of the total tax savings. For many of these well-positioned Americans, there are second homes with another mortgage deduction. Then, piling on, those with expensive homes can take a tax break of UP TO A HALF-MILLION DOLLARS when they sell their homes. Relatively few tax breaks go to low-income Americans. The total of mortgage and property tax subsidies is nearly DOUBLE the amount spent on public housing programs. Social Security: As noted, wealthy people are cashing in because of their longer lives. But there are more reasons for their late-life benefits. Lower-income earners are subsidizing the 10% of Americans who stop paying for Social Security when they reach the $127,200 income limit. Also subsidizing the rich are the unauthorized immigrants who pay for Social Security but are ineligible for benefits. Savings: A wealthy household can make millions in capital gains and pay NO TAX as long as investments are held, and then bequeath the estate to heirs with LITTLE OR NO TAX. Less fortunate Americans who have to rely on bank accounts get virtually no interest -- and the majority of overdraft fees.https://www.commondreams.org/views/2017/07/10/stunning-truths-about-bloated-safety-net-wealthy